Military Rotorcraft Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The military rotorcraft market is estimated to register a CAGR of more than 4% during the forecast period (2022-2027).

Due to the COVID-19 pandemic, the market of military helicopters was significantly affected as there were supply chain disruptions in the defense sector due to the imposition of lockdowns globally. This led to a significant decrease in total manufactured and delivered military helicopters in 2020. However, as the lockdowns were lifted in 2021, supply chain disruptions subsided, thereby leading to the recovery in the deliveries of helicopters to pre-pandemic levels.

The increasing military spending of the countries globally due to geopolitical tensions and border issues is accelerating their plans towards procuring new aircraft and helicopters to enhance their aerial capabilities. Furthermore, the countries are investing in modernizing existing helicopters with new equipment to strengthen their capabilities. Such investments into procurement and modernization of the military helicopter fleet are expected to propel the market growth during the forecast period.

In addition to procurement, the governments and armed forces globally are investing in developing new helicopter models with advanced sensor suites for situational awareness, communication suite, and weapon systems, among others. Such investments into developing new helicopter programs are anticipated to boost the market's growth in the future.

Key Market Trends

Attack Helicopters Accounted for Highest Share in the Market in 2021

The attack helicopter segment dominates the market and is expected to continue its dominance over the market during the forecast period. This is due to the procurement of attack helicopters on a large scale around the world to strengthen their defense force. For instance, as of October 2021, the US Department of Defense (DoD) was in talks with Boeing to procure at least 100 additional AH-64E Apache attack helicopters. The order is expected to be a second multi-year contract for the AH-64 program and is expected to be signed by the end of 2022. Currently, Australia, Egypt, Kuwait, and the Philippines, among others, are some of the countries approved by the US State Department to buy a mix of 86 examples of new-build and remanufactured AH-64Es. In April 2021, the US Army awarded Boeing a contract worth approximately USD 437 million for full-rate production of AH-64E Apache helicopters for Saudi Arabia. Work on this project is expected to be completed by 2025.

Similarly, to complement the existing fleet of attack helicopters, the Nigerian government is planning to procure about 12 twin-engine attack helicopters. The new attack helicopters are expected to support counterterrorism and counterinsurgency campaigns in the country with additional capabilities to perform search and rescue activities. As of April 2022, the government is in talks with Airbus, Hindustan Aeronautics Limited (HAL), and Turkish Aerospace. Such future procurement programs of the countries are anticipated to accelerate the segment's growth in the future.

Asia-Pacific Region is Expected to Generate the Highest Demand During the Forecast Period

The Asian-Pacific region is expected to witness the highest growth in the market during the forecast period, owing to the growing military spending of the countries in the region. In 2021, China, India, Japan, and South Korea were some of the top military spenders globally and were expected to continue to increase their military spending for the modernization of their military equipment in response to the growing tensions with their neighboring countries. For instance, in March 2022, the Philippine Air Force (PAF) received two of six T129 Atak helicopters on order from Turkish Aerospace Industries as a part of a government-to-government agreement. The procurement of T129 Atak helicopters is part of the Horizon 2 Modernization Plan of the Armed Forces of the Philippines, and the contract was worth USD 269.38 million. The remaining four are expected to be delivered between 2022-23. Also, in January 2021, Australia selected Boeing's AH-64E Apache Guardian as its next armed reconnaissance helicopter, replacing the current fleet of 22 Airbus Tiger helicopters. The contract was under the Royal Australian Army's Land 4503 program. The first helicopter is expected to be delivered by 2025.

In addition to such procurement programs, the local companies are developing new helicopter models tailored to meet the requirements of the armed forces. In this regard, Japan's Mitsubishi Heavy Industries announced that its XSH-60L Seahawk helicopter completed its first flight in May 2021. The XSH-60L Seahawk helicopter is an advanced variant of the Sikorsky SH-60 Seahawk developed for shipborne anti-submarine / anti-surface warfare (ASW) operations of the Japan Maritime Self-Defense Force (JMSDF). Such countries' investments in the procurement and development of new helicopters are anticipated to propel the market's growth in the region.

Competitive Landscape

The market for military rotorcraft is highly competitive, with few players accounting for the majority share of the market. Lockheed Martin Corporation, Boeing Company, Textron Inc., Rostec, and Leonardo SpA are some of the prominent players in the market. In 2021, Boeing delivered 83 AH-64 Apache (compared to 71 in 2020) and 20 CH-47 Chinook (compared to 30 in 2020). With support from the government, the companies are increasing their geographic presence in the market through new contracts with government agencies and armed forces in various regions. On this note, the Italian Secretariat General of Defence/National Armaments Directorate signed an acquisition contract with Leonardo in January 2022 to provide AW169M Light Utility Helicopters (LUH) to the Austrian Ministry of Defence. The contract was worth EUR 346 million (USD 422.8 million) and was signed under the Italy-Austria Government-to-Government (G2G) agreement. In addition to international players, local players like Hindustan Aeronautics Limited (HAL), Korea Aerospace Industries Ltd, and Turkish Aerospace, among others, are entering the market of military helicopters with the development of new and advanced helicopter models. The long-term contracts of helicopter OEMs with the armed forces for developing and delivering new helicopter programs are expected to help them increase their footprint in the market in the future.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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